Don’t Let Your Positive Cashflow Turn Negative
by Jeff Pepperney, Real Property Management
M aintaining positive cash flow is an important part of owning profitable rental homes. But that positive cash flow can easily turn negative unless you develop a proactive approach to property management. To keep your cashflow healthy, there are four essential steps you should consider taking. PERFORM REGULAR EVALUATIONS Regular property evaluations are the keystone of long-term profitability. Many real estate markets are in constant motion, which means that your property values will change. Because your rental rate and other cashflow metrics are based (in part) on your property’s value, fail- ing to regularly reassess your property could cause you to lose money if your rental rates are too low. But if your rate is too high, you will have a hard time attracting and keeping new tenants. You need current information and a detailed understanding of both your property and the local market to help keep your cash flow going strong. NO. 1 COMPARE LANDLORD INSURANCE Good landlord insurance is necessary to protect your investment properties. But good landlord insurance does not have to break your budget. Like property values, in- surance rates change all the time and vary from company to company. If you have not shopped around to compare insurance costs, there’s a good chance that you may be paying too much. This could impede your cash flow. To help keep it positive, compare costs not only when you buy the policy, but each year thereafter. NO. 2
properties is understanding how easy it is to lose money. Small losses can add up to big problems. If you’re not taking advantage of all the tax deductions available to you as a property owner, your cash flow may suffer. This makes it important to know which tax deductions you can take and how to properly document expenses. Most investors simply can’t do without a knowledgeable tax professional on their team. HIRE A PROPERTY MANAGER There are many reasons to choose a profession - al property manager, but helping to keep your rental properties profitable may be the most important. Man - aging a property requires a great deal of time and skill. Consider whether overseeing the day-to-day operation of your property is costing you more in time, money, and hassle than hiring a good property manager. Rather than risk your cash flow by trying to do everything yourself, it may make sense to bring in a quality property manag - er. In fact, the right property manager can not only help you improve the profitability of your properties, they can give you back the time and energy you need to grow your investment portfolio. NO. 3 At Real Property Management, we offer the tools and services that rental property owners need to maximize their cash flows. To learn more, please visit your nearest Real Property Management office. •
Real Property Management is not a financial advisor. This Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
TAKE TAX DEDUCTIONS One of the biggest challenges of investing in rental
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